Purchase scams originating from Facebook and Instagram are projected to cost UK consumers over £27 million this year, according to an analysis by Lloyds Banking Group.
The growing trend of online shopping has led to an increase in criminals deceiving consumers into purchasing goods and services that do not exist. Victims are often attracted by the lure of discounted or hard-to-find items, typically advertised through social media.
Scammers request that victims transfer money directly from their accounts to another account using Faster Payments, a method that offers limited consumer protection if something goes awry.
Recent research from Lloyds Banking Group, based on the analysis of reported cases among their more than 25 million retail customers, reveals that two-thirds (68%) of all purchase scams now begin on Facebook and Instagram. These platforms account for approximately 40% of the total losses associated with such scams.
According to the latest industry statistics, a UK resident falls victim to a shopping scam on these two platforms every seven minutes, resulting in annual losses exceeding £27 million.
The bank identified clothing, trainers, gaming consoles, and mobile phones as some of the most commonly advertised fraudulent items. The average loss for victims of purchase scams across the industry is around £570.
Lloyds urges technology and telecommunications companies to take more responsibility in preventing scams at their source and to assist in compensating victims of fraud that occur on their platforms.
Liz Ziegler, Fraud Prevention Director at Lloyds Banking Group, emphasizes that relying solely on the banking sector to detect scams and issue refunds allows platforms, where most of the fraud originates, to evade accountability. She states, “Social media has become the Wild West of online shopping in recent years, with very few checks in place to verify who is selling what. It’s high time tech companies stepped up to share responsibility for protecting their own customers. This means stopping scams at source and contributing to refunds when their platforms are used to defraud innocent victims.”